What Is Driving the Markets in April of 2016?

We’re just four months into the New Year, and the markets have been incredibly erratic. One day, stocks are up and then they’re falling rapidly. Nothing has remained stable for longer than 24 hours and this will undoubtedly give many investors tremendous concern. With a new month underway, investors are hoping things will turn around and begin to stabilize. What will drive markets this month? Will it be another nosedive or will stocks and commodities climb higher? Below, we’ll take a look at what could drive markets in April of 2016.

Oil

If you’re even remotely familiar with the markets, you’ll concur that oil plays a vital role in the day’s trading.

When oil falls, a chain reaction is set off and everything else ultimately follows suit. During the first trading day of the month, oil fell 4%! Much of this had to do with the reaction to Saudi Arabia reconsidering their output limitations. If the country and other major oil producers continue pumping out oil at current rates, it is almost certain that crude oil prices will continue to plummet. The Chinese and North American demand is also significantly lower than in 2015. This will prove to be very harmful for investors and will likely result in decreasing markets for April. Even if you don’t own energy stocks, this should be very concerning.

China

Another major factor to consider is China. Don’t worry. I'm not talking about Donald Trump propaganda. However, China does impact the markets! The scariest news of all is the fact that China’s industrial product growth has started to grind to a halt. For the fiscal year of 2015, China’s industrial production increased by just 6.1%. During the previous year of 2014, China grew at 8.3%. To make matters even worse, the country’s industrial production has grown at just 5.4% for January and February of 2016. If this continues, April may be a scary month for investors.

American Economy

If you’re looking for an indicator of what to expect in April, you won’t need to look far from home. Despite the president’s statements about the economy beginning to thrive, this couldn’t be further from the truth. The fact of the matter is that the older population of the United States will soon increase to record numbers. In the coming years, the aging population is expected to double to approximately 98 million. When adding this factor to the dwindling labor force and the health, housing, and social security costs for the elderly, you will see that America’s economy will be put into a stranglehold with nowhere to go. Even the jobs report for March cannot rectify America’s economic problems.This may not have much of an impact on April, but it will begin to rear its ugly head soon enough.

Technology Boom?

Unlike the rest of the market, technology, especially the smartphone, is expected to remain on pace. Gartner predicts that by 2019, 150 million smartphone users will be sitting idle, since prices have not dropped off enough to encourage upgrades from the low-end phone. A 0.6% increase globally in PC, mobile phone, and tablet sales is expected this year, so there is still a glimmer of hope out there.

Looking Ahead

Unless you’re willing to try Forex trading, April is beginning to look bleak, and it has only just started. The good news is that there are a few glimpses of light beneath the shadows. The technology industry and a few others may lead to gains, but energy dependent markets will likely continue to see volatility.